GENERAL OVERVIEW ON ANNUAL RETURNS
An annual return within the context of the Companies Act refers to a form prescribed and named as Form 22 under the Companies Regulation 1998.
Requirement to submit annual returns is mandatory regardless of whether or not a company is physically operating or by book.
Form 22 is of course distinctively different from all the other returns within the PNG jurisdiction.
It is important to acknowledge at this stage that there are other government agencies that require submission of certain other documents on annual basis which may be referred to as annual returns which should not be confused with Form 22 required by theRegistrar of Companies.
Being a prescribed form, specific information are required therein and must meet requirements to serve intended purposes the ROC is mandated by the 'Act' .
ANNUAL RETURN FORMAT
The prescribed annual return form at present is in its simplified format in the sense that an average laymen should be able to understand and complete one.
Generally speaking the information required to be supplied therein are very basic as specified in Schedule 6 of the Companies Act.
Accordingly there are at least 29 items in the Form 22 for completion.
On normal occasions though, a company may not need to provide information on all 29 items depending on the specific circumstances faced by any particular company.
WHEN TO SUBMIT FIRST ANNUAL RETURN
By statute, the first annual return is required to be submitted in the year following the calendar year of its incorporation.
This barely means that any company incorporated from 1 January 2008 to 31 December 2008
for instance, must lodge their first annual return in the year 2009.
However, exceptions may be granted for companies incorporated in the last three months of the year, say from 1 October 2008 to 31 December 2008 to lodge their first annual return NOT in the following year but in the proceeding year at least within 18 months.
Obviously, it would be unfair to have a company incorporated at the end of the year to start
reporting in the year following calendar year of its formation.
WHEN TO DELIVER SUBSEQUENT ANNUAL RETURNS
Every director of all registered companies including overseas companies are mandated by the ompanies Act to ensure that subsequent annual returns are delivered to the Registrar of Companies once every calendar year with 6 months from the close of its financial year referred as 'balance date'.
REQUIREMENT TO ATTACH FINANCIAL REPORTS
It is worth mentioning at this stage that some companies 'classed' as reporting companies are required to attach audited financial statements to the Form 22 as additional requirement.
Any ordinary company becomes a reporting entity when shareholders resolve to appoint an auditor.
In addition, a company automatically becomes a reporting when total number of shareholders exceed 25, employs 100 plus employees and whose total value of assets exceeds K5 million.
CONSEQUENCES OF NONCOMPLIANCE
The failure of noncompliance by companies result in two main consequences. First, every director of such a defaulting company become personally liable for penalties set out in PART XXII of the Companies.
This is wherein our enforcement team takes legal proceedings to prosecute defaulting company directors. Second, the defaulting companies get struck off the list of registered companies.
DE-REGISTRATION OF COMPANIES
Companies which fail to deliver annual returns within reasonable timeframe are listed and given notice to comply or face de-registration either through publication in the daily newspapers or directly through
written correspondences.
Ample time is normally given after the publications while awaiting compliance. Companies that do not comply despite the issued notices are ultimately removed from the 'Register'.
WHAT HAPPENS AFTER A COMPANY IS DE-REGISTRATION
Management of the De-registered companies realize sooner or later that they become unable to carryon business whilst bearing a 'De-registered' tag.
This prompts aggrieved parties to reinstatement their companies.
REINSTATEMENT PROCESSES
There are two (2) possible processes known in the Companies Act 1997 through which a de-registered company can be restored to the Register.
It is up to the intending parties to decide for themselves as to which
process to take.
1. By National Court Order - Normally in this process the aggrieved party or parties make application to the National Court.
The ROC's consent may or may not be sought in this proceeding.
However, Court Order to reinstate de-registered companies are normally given on the condition that the ROC is satisfied with the requirements so far met.
2. Administrative Reinstatement -
Under this option the Registrar guides the applicants through the reinstatement process through the use of its adopted forms.
It involves obtaining consent/approval of the ROC, followed by publication of the applicants' intention to reinstate de-registered companies on newspapers and on the National Gazette.
For information this administrative reinstatement amicably takes up to two (2) months the most including the one (1) month objection period.
In both cases annual returns and their applicable fees must be paid and the Registrar must be satisfied that all outstanding requirements have been fully met before restoring a de-registered company to the Register.